Freddie Mac Brings Good News for Chicago Home Sellers
If you’re trying to sell a condominium or single-family home in Chicago, you want the national economy to continue to improve. Consumers are more likely to buy a home if they’re not worried about losing their jobs.
A recent report by Frank Nothaft, chief economist with Freddie Mac, brings good news regarding the country’s economy. The report lists four signs that the national economy is slowly returning to normal.
And what are these signs? First, Nothaft points out that companies are finally starting to hire new workers again. According to the column, the country added 230,000 new jobs on average for the first seven months of 2014. This is important news for home sellers. When more people are employed in steady jobs, there are more potential buyers for those homes that are on the market.
Nothaft writes, too, that the average number of persons per household in the United States has increased by 2.6 percent from 2005. The average household in the United States now contains 2.76 persons. In 2005, it contained 2.69 persons. If the number of people living in a household had remained at the 2.69-person level since 2005, there would be an additional 3 million households in the United States today. That’s a lot of homes that weren’t needed from 2005 through today. Nothaft predicts that as employment numbers continue to improve, the number of people squeezing into the typical U.S. household will start to fall. People moving out will need someplace to live which is more good news for U.S. home sellers.
In more good news for the housing market, Nothaft writes that the monthly mortgage payment-to-rent ratio for the United States is near the lowest it has been in more than 40 years. This means it is about as affordable to own a home as it is to rent an apartment in many markets across the United States, including Chicago. This bodes well for home sellers, as a strengthening economy will only make homeownership more affordable for a growing number of consumers.
Finally, Freddie Mac’s latest economic forecast predicts that the country’s economy will continue to grow — by an average of 3.3 percent in 2015 — and that its unemployment rate will continue to gradually decline. This will lead to a growth of household formation, increasing demand for those homes on the market.
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